We need to talk about Angel Investors

rjlinnovations's AvatarRest In Peace

I think this thread is VERY necessary. Inventors and angel investors sometimes go together like peanut butter and jelly, the peanut butter and chocolate in Reeses, and are not that good without each other. Thomas Edison needed J.P.Morgan who put up the cash for Edison’s progress. Without J.P. Morgan, Edison may have not been who he was.

Me, stubborn, half Polish…have it in my head I won’t take on an angel investor just for money. I won’t take a 100 or 200Gs just for capital and then have to give back 50% of profits forevermore. Maybe I’m wrong. Am I?

I would take on an angel that would roll up their sleeves and work alongside me. That could be great!

What are people’s feelings on investors? Where do you find them? I have an entrepreneur group around here where the “NJ angels” hang out at meetings.

There are groups of investors, maybe every state has them with a related name. I know of “Texas Angels” “NY Angels” and a website for seeking capital where there are angel investors and venture capitalists at www.go4funding.com It does work too…trust me. I met investors there and we talked biz.

Anyone ever do a 10 minute elevator pitch for investors?

Ron Komorowski
Inventor of Handi-Straps
www.handi-straps.com

posted August 04, 2008 18:09 (
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rogerbrown's Avataren_staff_badge

Here is a thread I started on this topic that might help. Lesson #14 What do you know about having Investors? http://www.edisonnation.com/forums/other/topics...

There isn’t a week that goes by that I don’t have several Inventors contact either asking if I would like to invest in their idea or can I direct them to someone that would invest. The thing that troubles me is the lack of understanding of what they are asking and what it will require. I have listed some questions and information below that you need to consider before asking for an investment. Can you tell me any other questions you would ask or information you would want if you were the investor?

1. Not knowing how much they realistically need in the form of an investment to get their product from idea to the store.

2. Not knowing the value of their product so they can break the investment down into percentages. The Investor will need to know what percentage of the product/company they will own for their investment. Example: Does a $50,000 investment get them 10% of the company? 3. Not having a business plan detailing how they plan on spending the money once they have the investment. 4. What ROI (return on investment) the investor can expect and how soon after the investment can they expect to see a return? 5. Will you need more than one round of investment money? 6. Do you have a distribution network for your product? 7. Do you already have other Investors? 8. Do you have a working model? 9. What protection do you have for the idea, if any? 10. Who are your competitors?
posted July 02, 2011 17:26 (
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kimoracay's Avatar

Interesting. Something to think about.

posted July 02, 2011 14:35 (
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booradley1's Avatar

I am bumping this. Anyone have experience with angel investors? Good or bad?

posted July 02, 2011 13:21 (
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rjlinnovations's AvatarRest In Peace

Eva…can you please post the link…I would like to read too!!! Good for you! See…I knew you really were on the ball!

posted August 05, 2008 16:11 (
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rjlinnovations's AvatarRest In Peace

Toni…I have lots of ideas. Another 6 or so still in my notes or dust collecting prototypes that need to be “put into motion” They are all winners.

Handi-Straps is not up for bid for any investor but some of the other ideas are. I can’t run them all and need a partner basically…but that partner can throw in a few bucks as a measure of good faith let’s say.

I will say one thing that all should realize. Once the initial “machine” is built which isn’t hard, the product goes off on it’s own. You advertise a little maybe and make sure the boxes go from manufacturer to retailer. Not that much to do and you make probably triple or better the amount of licensing…BUT…less likely of the ball getting slapped out of your hand at that point.

posted August 05, 2008 16:10 (
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eva's Avatargold

chic thanks!…..i appreciate the thumbs up!…..

posted August 05, 2008 16:09 (
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rjlinnovations's AvatarRest In Peace

Chic…in a way…sure. Costs LOTS of money…that they put up. Tell me Chic…would you like to be Louis helping everyone?

You might say Santa Clause is real!!! Santa is Loius Foreman!!

posted August 05, 2008 16:05 (
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nospohenterprise's Avatar

Isn’t Everyday Edison considered to be an angel investor? Just think about it.

posted August 05, 2008 15:59 (
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marcus's Avataree_badge

Angel investors and VCs don’t seem to have a place for us inventors that prefer licensing. They are missing a huge opportunity. Inventors who want to focus on creating ideas instead of running companies are willing to give up a lot for a stipend.
Currently, about the only way an inventor can get
income to support themselves is to work a day-job until you get your first successful license out there.

posted August 05, 2008 15:56 (
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nospohenterprise's Avatar

Eve,

I just read an article about you on google and I’m truly impressed and honored to share the same site with you. I hate to say this but

YOU GO GIRL

Chic formally known as firefighter 919

posted August 05, 2008 15:51 (
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toni's Avatarg8_badge

Ron, if I get rich with any of my inventions,
I’ll be your angel investor. I think your
product is great and will save many lives as
well as backs. I know, I had back surgery and
I have never been the same.

posted August 05, 2008 15:43 (
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eva's Avatargold

ron, i am started to understand you more and more…see, i am not interested building a business based on my product…and now i understand that you do….and now i understand why you would want to go angel investor route…..and please tell me the angel investors have fluffy white feathers, or you will break my heart, just like my girls’ hearts were broken when they heard the truth about the tooth fairy……i admire your strength, tenacity, and your perspective….thanks for sharing….and uh, i hope to get a couple thousand out of my product

posted August 05, 2008 15:40 (
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rjlinnovations's AvatarRest In Peace

Eva..I guess it’s like you said…to each their own.

I am more into business than inventing. I want a big company. It would be GREAT to have maybe 10 people from here working with me, and the company can help on the side other’s inventions…or I’m just saying I like people. There are smart people here filled with passion! I like a team. Work together, have fun. Building a company is very exciting.

I just wouldn’t be fulfilled collecting checks in the mailbox. Some would be thrilled with that.

In my case I need a partner. Right now my manufacturer is my partner of sort. I go there, we laugh, we go to dinner, sing karaoke at night and figure future strategic plans. GOOD stuff!

An angel investor is tough though. Suppose you end up hating them but still have to mail a monthly check for the next 20 years! It might be harder to find an angel than a marriage partner.

I had two guys that were coming in. Both multiple times CEOs for small companies that went public. Sharp business guys out of NYC. They knew business with their MBAs and could run the show and could be the wild creative research and development guy and marketing schemer. Looked good until one of the guy’s wife got severely sick with a sudden strong case of MS. We would have done very well. We both have hearts of gold.

I think a licensing agent may be for an inventor that is not good at business or selling.

I do remember a cover of Inventors Digest that said Inventing + Marketing = Jackpot. Meaning if you could do both you are set up to do best. I believe it.

I see your drive Eva…there was a woman on the Big Idea that started a fashionable maternity line of clothing. She is supposed to do 100 million in gross sales this year (don’t know if that can happen with this economy, maybe compared to last years numbers) Eva, maybe that can be you?

posted August 05, 2008 14:08 (
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eva's Avatargold

if you are going to go the route of an angel investor, why then not go the route of a licensing agent?…..when i think angel investor, i think having a boss telling me what to do….being under extreme pressure…and i became an entrepeneur to avoid the stiffling experiences back in my former life working for a big corporation……so, in my mind, i thought license the puppy out, i become their micro-manager, and i get a cut of the profits, and i am free to further pursue my other ideas for products and businesses…

posted August 05, 2008 08:52 (
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dentistrecommended's Avatar

I think if you can do it. DO IT!!

BUSINESS PLAN detailed out to a T on everything from exact production cost to when it is going to sell. These people need numbers.

This would work:
Present your idea to a retailer and get them to agree to stock your product if properly produced and proper shipping arrangements in place, think numbers. Then you will be able to find an angel investor easier because their investment is already sold.

Just my opinion
thanks

posted August 05, 2008 08:36 (
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eva's Avatargold

ron, i went this route of angel investors (i kinda had the image of the white fluffy wings floating above me saying “we love parent inventors…we will make your dreams come true”….uh, i was dilusional….however, i am glad i went through the motions because i did talk to some people with good advice…

posted August 05, 2008 08:28 (
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rjlinnovations's AvatarRest In Peace

Toni,

This is why this thread is necessary. Every inventor needs to know and consider investors.

I met many angel investors and a good number offered me funding which I turned down. They are generally very cheap. They want half of your life’s purpose for a 100G’s or so and they think they have done all of their job by putting up the money. My view may be dead wrong….someone tell me if I am.

I would gladly take an angel if they would take a seat in the executive office. COO, Director of Marketing, CEO even. I have the patents, they have the money, even contribution I think.

Most angels think they are the ****. They want you to mail them a check and and the most they have to do is open an envelope. There are exceptions and an angel may want to work and get involved. This is what I am trying to find.

Now what I did was smart. I said…hey…my invention is very important to a manufacturer. Why don’t they become the angel (of sort) If they want this product let them put something up.

That is what my manufacturer did. They also take care of half the work such as boxing up the product and shipping one by one which they do for no other product. Thing is, I don’t have to give any percentage of profits for this like I would an angel.

If you have a big product, your marketing research, and you are willing to join their team and pitch in some work you may be able to bypass investors like I did.

What I want for my other inventions is to find an exec that has a few bucks but his company has dissolved and now he is looking for another story; this is someone who wants to still work and be hands on. Maybe a small company that wants to add a whole new division and will put up a few bucks.

That’s just me, some people are happy with just the money from an angel, and yes they will offer some consultation sometimes, but anyone can be an angel investor by definition.

You could be in a bar and the bar owner could overhear your conversation and offer financing. He may know nothing but how to serve drinks and run a bar; but he would be called an angel investor.

For the record. Venture Capitalists are the next level in financing who generally only invest if the company is willing to have an IPO Initial public offering, go public, sell stock; and the company must be operational at a larger scale and strongly successful before they will look.

VC’s don’t fool around with small amount either. They want to invest at the very least 1 million. Small deals they have no time for.

Ron Komorowski
Inventor of Handi-Straps
www.handi-straps.com

posted August 05, 2008 07:19 (
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toni's Avatarg8_badge

Ron, I did my elevator pitch, now I just
have to fine that investor to pitch it too.

About Angel Investors, if I were you, with a brain like yours, I would go 50-50 split with
an Angel Investor with Handi-Straps just to get
your company started.

You have so many more ideas in your head; let your baby grow with the help of an Angel.

The next of your babies – you can do on your own.

But you gotta give to get sometimes…..

posted August 04, 2008 18:20 (
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